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HomeMy WebLinkAboutDraft 09/06/11 Minutes0 PRIO ti U \ 4646 Dakota Street SE Prior Lake, MN 55372 REGULAR CITY COUNCIL MEETING MINUTES September 6, 2011 CALL TO ORDER The meeting was called to order at 7:00 p.m. Present were Mayor Myser, Council members Erickson, Kee- ney and Soukup, City Manager Boyles, City Attorney Pace, Finance Director Erickson, City Engineer / In- spections Director Poppler, Public Works /Natural Resources Director Gehler, Water Resources Engineer Bintner, Community and Economic Development Director Rogness, Planner Matzke, Fire Chief Hartman, Assistant City Manager Kansier, Assistant City Manager Meyer and Administrative Assistant Green. Coun- cilmember Hedberg was absent. PUBLIC FORUM The Public Forum is intended to afford the public an opportunity to address concerns to the City Council. The Public Forum will be no longer than 30 minutes in length and each presenter will have no more than ten (10) minutes to speak. Topics of discussion are restricted to City governmental topics rather than pri- vate or political agendas. Topics may be addressed at the Public Forum that are on the agenda except those topics that have been or are the subject of a scheduled public hearing or public information hearing before the City Council, the Economic Development Authority (EDA), Planning Commission, or any other City Advisory Committee. The City Council may discuss but will not take formal action on Public Forum presentations. Matters that are the subject of pending litigation are not appropriate for the Forum. Comments: Patrick Heaney, 4642 Pleasant Street, commented that the CR 21 reconstruction discussion has brought forth complex ideas involving a lot of people and a lot of emotions regarding historic downtown. Stated he has lived in his home for 37 years. Stated he is an idealist and believes in the collective "we" for parks, roadways, etc. Has been frustrated with this topic, but thanked Hedberg for meeting with him and having discussions that rejuvenated his belief in process. Believes downtown is the heart, soul and character of Prior Lake. Stated downtown was zoned TCT in 2003 (town center transition) which has limits for im- provements. Believes potential blight could occur there. Believes the Maxfield process on CR 21 was flawed because no residents were involved in it. There were situations where residents became suspicious or polarized. Stated he has spoken to more than 50 residents and none support rerouting CR 21. Com- mented on what he believes are flaws in the plans developed in 2005. Believes CR 21 should not have a bypass, the process should freeze where it is now and more solutions should be explored. Josh Johnson, 4527 Pleasant Street, posed the question of what makes Prior Lake different from any oth- er place in the metro area. Asked if the CR 21 plan will fit within what makes Prior Lake unique. Believes if it does, it will have community support. Ron Wolfram, 4612 Pleasant Street, expressed concern about having a roadway cross the wetlands as proposed in the realignment scenario, due to the potential of pilings being driven into the aquifer to try to stabilize the roadway. Would like to know what studies were done to learn feasibility of going across the wetland. APPROVAL OF AGENDA MOTION BY ERICKSON, SECOND BY SOUKUP TO APPROVE THE AGENDA AS PRESENTED. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. APPROVAL OF MEETING MINUTES Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com MOTION BY SOUKUP, SECOND BY ERICKSON TO APPROVE THE MINUTES OF THE AUGUST 15, 2011 MEETING AS PRESENTED. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. CONSENT AGENDA City Manager Boyles reviewed the items on the consent agenda. A. Consider Approval of Invoices to be Paid. B Consider Approval of the July 2011 Treasurers Report. C. Consider Approval of Resolution 11.104 to Renew Agreements with Credit River Township and Spring Lake Township to Provide Fire and Rescue Services. D. Consider Approval of Resolution 11.105 to Close and Transfer Account Balances to the EDA Special Reve- nue Fund. E. Consider Approval of Resolution 11.106 for an Amendment to the Zoning Map for Approximately 15.5 Acres of Property Located Northeast of the Intersection of CSAH 21 and Fish Point Road from R -1 (Low Density Residential) to C -2 (General Business). F. Consider Approval of Resolution 11.107 to Approve a Registered Land Survey Involving Two Single- family Residential Properties Located Along 150th Street NE. Councilmember Keeney asked that items 5D, 5E and 5F be removed from the Consent Agenda for dis- cussion. MOTION BY SOUKUP, SECOND BY ERICKSON TO APPROVE THE CONSENT AGENDA AS MOD- IFIED. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. Comments: Keeney: Regarding item 5D, stated that his understanding was that a preliminary budget from the Eco- nomic Development Authority (EDA) would be brought before the Council before any transfer of funds; and that discussion had taken place of funding half of a position from that budget. J. Erickson: Replied that agenda item 10B includes a preliminary budget for the EDA with a special reve- nue fund. What is different about 2012 budget for EDA compared to 2011 is that 50% of the community and economic development director position is included as well as an additional $50,000 for professional services to conduct business. Myser: Asked which items on the Treasurer's Report are part of economic development. J. Erickson: Stated that the three funds with this agenda item are fund 250 (economic development fed- eral revolving loan fund), 255 (the economic development Minnesota revolving loan fund), and 256 (down- town redevelopment fund), but not fund 402 which is a separate tax increment fund. Myser: Noted that $178,000 is listed in fund 402 and asked if that fund is part of economic development or why is it discussed as part of an EDA transfer. Boyles: Replied that it is not contained in the agenda report, but he thought it important that the Council be aware of it. That money could be designated for EDA purposes. Myser: Asked which funds listed might be able to be earmarked for EDA if Council would so choose. Asked about fund 413. J. Erickson: Replied that staff will be reviewing the tax increment plans to see what flexibility we have in the funds. Certain restrictions must be followed. Discussion for TIF 1.4 might include future of fund 402 (tax increment) which will include looking at options for considering how funds can be used for economic development. 2 DRAFT 09 06 11 City Council meeting minutes Keeney: Regarding item 5E, asked if there is a map showing the property that is being discussed. Matzke: Displayed site map showing where a street would separate the two kinds of zoning. Stated that bufferyard requirements will be met. Keeney: Regarding item 5F, asked if there is a map showing the property that is being discussed. Matzke: Displayed a site map showing the requested lot transfer. Stated that landowners are transferring property; and due to the complexity of the legal descriptions including lengthy metes and bounds descrip- tions, the recording office requested that the platting process be undertaken. Therefore, a land survey was undertaken which must be brought before the City Council for approval. Stated that the Planning Commis- sion has approved this transfer and granted variances for lot widths. MOTION BY KEENEY, SECOND BY ERICKSON TO APPROVE RESOLUTION 11.106 FOR AN AMENDMENT TO THE ZONING MAP FOR APPROXIMATELY 15.5 ACRES OF PROPERTY LOCATED NORTHEAST OF THE INTERSECTION OF CSAH 21 AND FISH POINT ROAD FROM R -1 (LOW DENSI- TY RESIDENTIAL) TO C -2 (GENERAL BUSINESS); AND RESOLUTION 11 -107 TO APPROVE A REG- ISTERED LAND SURVEY INVOLVING TWO SINGLE - FAMILY RESIDENTIAL PROPERTIES LOCATED ALONG 150TH STREET NE. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. MOTION BY ERICKSON, SECOND BY SOUKUP TO APPROVE RESOLUTION 11.105 TO CLOSE AND TRANSFER ACCOUNT BALANCES TO THE EDA SPECIAL REVENUE FUND. VOTE: Ayes by Erickson, Myser and Soukup. Nay by Keeney. The motion carried. PRESENTATION None scheduled. PUBLIC HEARING None scheduled. OLD BUSINESS Consider Approval of a Resolution Authorizing the Mayor and City Manager to Enter into the City's Standardized Purchase Agreement for Property Located at 4580 Dakota Street (Hayes) and Autho- rizing Expenditure of Funds. Assistant City Manager Meyer presented the purchase agreement for 4580 Dakota Street. Stated that the seller wants to sell the property "as is." Staff had inspections done to learn the cost of bringing the property to a leasable condition. Outlined benefits and challenges of purchasing the property. Reviewed the needed repairs, the status of the retaining wall and potential costs to repair it, and the potential reve- nues from renting the property. Comments: Erickson: Asked if the appraised value of $160,000 meant all mechanicals are in working condition, or as- sumed the repair costs did not exist. Meyer: Replied that the appraisal was a visual and did not test the mechanics, but assumes they operate efficiently. Erickson: Asked about the mold. Meyer: No dollar value was given for the cost to mitigate the mold. Erickson: Asked if the cost of work that needs to be done should be subtracted from the purchase price or taken care of by the seller. 3 DRAFT 09 0611 City Council meeting minutes Meyer: Stated that the City has not entered into a purchase agreement in order to bring these costs back to the Council. The seller has indicated they are interested in negotiating for those repair costs. Erickson: Some items should not be passed back to the seller, such as miscellaneous repair and cleanup. The mold and replacement of the furnace should be taken care of by the seller or the cost reduced to cover that. Suggested that either $22,000 should be reduced from $160,000; or the offer of $160,000 made with the items taken care of prior to purchase. Keeney: Commented that it would cost $28,000 to put the property into rentable condition. Believes it would be most efficient to make it into a parking lot if that is the desired outcome as repairing and renting the property is not a good use of staff time and resources. Asked if a parking lot is needed now. Boyles: Replied that the parking lot study states the City has a deficit. Stated this property would not be a major solution in the overall need for parking. Keeney: Stated it seems to not make sense to get into the landlord business. Parking could better be pro- vided by opening up the space between the police station, dental office and library. Soukup: Understands more parking downtown is needed. Stated that two or three years would be re- quired to recoup the costs for initial repairs and then another $90,000 would be required to change the property into parking lot with no chance to recoup those costs. Does not see value in the City owning the property. Meyer: Stated he did not support the purchase at $160,000 and still does not with additional repair costs. Supports that downtown parking needs to be addressed and would rather reserve these funds for a better parking solution. Erickson: Would support the purchase for $138,000 and have the City take care of the expenses. Myser: Commented that the total cost of the parking would be nearly a quarter of a million dollars with a cost per stall of around $20,000. Keeney: Recalled that downtown parking is projected to be closer to $5,000 per stall. MOTION BY ERICKSON TO APPROVE A RESOLUTION AUTHORIZING THE MAYOR AND CITY MAN- AGER TO ENTER INTO THE CITY'S STANDARDIZED PURCHASE AGREEMENT AS MODIFIED FOR THE PURCHASE OF PROPERTY LOCATED AT 4580 DAKOTA STREET SE, AND AUTHORIZING EX- PENDITURE OF FUNDS FOR PURCHASE OF THE PROPERTY IN AN AMOUNT NOT TO EXCEED $138,000. The motion failed for lack of a second. NEW BUSINESS Consider Approval of a Report on an Update to the Municipal Separate Storm Sewer System Permit and Adoption of a Resolution Supporting LMC Efforts to Modify MS4 Requirements. Water Resources Engineer Bintner stated that the Minnesota Pollution Control Agency (MPCA) issues the MS4 permit. The current permit is expired, but the City can operate under the expired permit until a new one is issued. The Total Minimum Daily Loads (TDML) are a prescription for an individual water body that sets a pollution target and then local authorities must devise means to reach those targets. The re- newed permit is anticipated to be less flexible in allowing local resolution of water resource pollution control and the City's current water resource management would have to change if the MPCA permit is not re- vised. Many locally tailored solutions have been put forward and the new permit may change that. The League of Minnesota Cities along with its Minnesota Cities Stormwater Coalition has submitted comments in response to the draft permit. Comments: Soukup: Asked the status of the LMC and MN Cities Stormwater Coalition petition. Bintner: Replied that the public comment period closed at the end of last month. He expects some changes will happen. Waiting for response. 4 DRAFT 09 0611 City Council meeting minutes Soukup: Asked how many cities are involved. Boyles: Replied there are 855 cities in the League. Bintner: Added that this permitting covers the MS4 regulated cities and about 90 cities have chosen to join LMC's stormwater coalition. Soukup: Asked about the cost per pound of removing phosphorus and whether that cost will trickle down to resident's water bills. Bintner: Cited advantages the City has in cost containment such as the engineering legwork being done to achieve cost efficiencies, owning the land where the treatment happens and working on a regional basis. Keeney: Asked the reasonable expected outcome of receiving significant revisions to the permit. Bintner: Believes the chances of change are good as people begin to understand cost of implementing the proscribed processes. Keeney: Asked what the driving force is behind trying to establish the stricter rules. Gehler: Responded that although Prior Lake is doing quite a bit to reduce pollution from stormwater, the same level of effort is not being put forth statewide. Costs would go up if a site by site basis for treatment is required. We take a regional approach to treatment and are asking them to let us look at what is best for our City in treating stormwater. Erickson: Asked Bintner to outline what has been done to help prevent some of the expenses that would be incurred. Bintner: Replied the City is putting projects together by calculating per pound cost and life cycle costs and calculating how to spread the projects over several sites rather than restricting ourselves to a single site or single practice. Practices include iron enhanced filtration systems, street sweeping program, etc. The total solution is not yet written, but it is anticipated to include a mix of practices. Erickson: Queried whether this new permitting process would restrict us from using the innovations. Bintner: Responded that the City would want the freedom to plan a process over a period of time using the practices that will work for that area. Myser: Read from the LMC letter to the MPCA regarding arbitrary and capricious requirements. Asked about the process they go through and whether they had any rulemaking during the stakeholder process. Bintner: Rulemaking might happen on a variety of issues ahead of a permit process. LMC is suggesting that if the permit in its current form had legal basis in the rulemaking process, the rules would look different now if they were legally supported. Myser: Asked if this was done by staff at MPCA, who was participating and who would have signed off on this. Bintner: Replied the decision to approve it would be the commissioner and agency at citizen's board level. Myser: Seems they may have overstepped their bounds. Hopes that some of the work we have been doing as a broader water quality group in Scott County to reach out to meet representatives from DNR, BWSR and MPCA to share with them some of the cost - effective work we have been doing will help them understand there are better ways to go about this. Supports getting behind the LMC on this action. MOTION BY SOUKUP, SECOND BY KEENEY TO APPROVE RESOLUTION 11.108 REQUESTING MINNESOTA POLLUTION CONTROL AGENCY CONSIDERATION OF REVISIONS TO NEWLY PRO- POSED MUNICIPAL SEPARATE STORM SEWER SYSTEM PERMIT. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. Consider Approval of a Resolution Adopting Proposed 2012 City Budgets and Certifying Prelimi- nary 2012 City of Prior Lake Tax Levy to Scott County Department of Taxation. Finance Director Erickson reviewed details of the 2012 preliminary budget and tax levy. Stated that the Truth in Taxation meeting is scheduled for 7 p.m. on December 5, 2011 in City Hall. Explained variances between the 2011 and 2012 General Fund budget. Reviewed proposed personnel changes for 2012 de- scribing the variances from the 2011 fund budgets. Stated this budget results in a zero change in the tax 5 DRAFT 09 0611 City Council meeting minutes levy from 2011. Spoke of the factors that have an impact on property taxes: valuation, classification and levy, and provided current the status of those items. Reviewed the market value exclusion recently enacted by the State. Comments: Keeney: Noted that the Mayor and Council portion of the proposed budget has been increased 4% over 2011. Asked the cost of living adjustments calculated for personnel as well as the anticipated costs of step increases and health insurance costs. Meyer: Replied that approximately 2% is calculated for COLA. Steps are included in the budget assump- tions and rate increases from the coop for health insurance are identified to be 4 %. Added that a health insurance task force represented by all employee groups is considering what other plan options are availa- ble and what those rates would be. Hopefully, that will save money for the City and the employees in the long term. J. Erickson: Steps equate to $80,000 which is about 0.8% for the General Fund budget. Keeney: Commented that as a policy matter, the General Fund shows an increase of 3.6% and an overall increase of 1.65 %, with an attempt to get service levels back to the level of 2008. Believes that is the wrong direction. Stated one of the reasons the budget level in 2010 was set was because we felt we were spending more than we can afford. Stated that, from an affordability side, he does not want to make this increase and does not want to add new positions this rapidly. Believes the City needs to have fewer em- ployees per capita. Supports removing the 4% increase from the City Council budget as a symbolic ges- ture. Erickson: Remarked the market value exclusion is not a City policy, but rather a State policy. Asked if people must live in the home to receive the exclusion. J. Erickson: Affirmed, noting that the homestead classification still exists. Erickson: Commented it is commendable to have put together a budget with a zero percent levy consider- ing that it includes monies to take care of deferred maintenance that has not been funded to this point. The City is beginning to plan ahead and set money aside to handle such expenses in the facility management and equipment management funds. Believes the two proposed positions are needed. Supports the pro- posed budget. Reiterated that this is a preliminary budget and represents the maximum amount to be le- vied. Soukup: Asked about the contra revenue account with $260,000 and asked if that has been on the books for three years. J. Erickson: Replied that amount is not cumulative, but rather is the amount for 2011 and represents an aid payment from the State. Such aid payments have not been received since 2008. Soukup: Asked what happened with the numbers from previous years. J. Erickson: A negative revenue has been budgeted in previous years. Explained that municipalities work on a cash basis vs. accrual basis so tax revenues are not recognized until they are received. Soukup: Clarified that going forward this line item will not exist. Queried the hours for the utility billing clerk. J. Erickson: Replied that position will be going to 32 hours per week and is a non - benefit position. Soukup: Stated that when considering services to citizens and the things for which the City is responsible, much of the information is generated by staff and the finance department. Believes that decisions are only as good as the information that is provided and another accountant is needed. Asked the level of account- ing capacity that is anticipated. J. Erickson: Replied that a professional level accountant, bachelor level with municipal experience is de- sired. Soukup: Supported the need for a police supervisor position citing situations where the level of service has not been par. Stated she is not willing to jeopardize the necessary level of service. Supports the two positions and the proposed budget. 6 DRAFT 09 0611 City Council meeting minutes Myser: Understands that even when setting a levy of $10.1 million in 2010, the City only expected to re- ceive $9.855 million because the aid for the State was not expected to be collected. The change to market value exclusion will effectively mean a zero levy is really going to be a 2.5% increase. Now, the levy we charge, will be the levy we collect. J. Erickson: Commented that, as discussed at the August 15 work session, if the levy is kept the same it would result in an increase because of the exclusion and moving the funding from the State to the resi- dents. Myser: Asked where the level of reserves is at with actual performance. J. Erickson: Replied that after the second quarter, the City was at a $200,000 increase in reserves. Third quarter actuals are being prepared for October. Myser: So this proposed budget shows current expenditures running $44,000 less than budgeted. This results in the fourth year that the City will have an excess. J. Erickson: Affirmed that is $44,000 showing budget to budget. Myser: Does not support increasing the number of employees. Does support the additional money in the facility maintenance budget. Feels a responsibility to the residents to return the money they have paid in and supports lowering the levy at this point and reducing the reserves now rather than holding onto it for a longer period of time. Supports a levy of less than $9.855 and using reserves. J. Erickson: Commented that Council has discussed use of fund balance reserves and called out in a fi- nancial policy and the capital improvement program what the reserves would be used for such as the facili- ties management fund and the technology fund. There are uses for the fund balance reserve that are es- sential for funding those other plans and a number of uses have already been identified for a significant portion of the reserve. Noted that the purchase of the Hayes property was going to use some of the re- serve fund and that is now off the table. Myser: Concurred those expenditures are planned over multiple years. The reserve has approximately $7.3 million. Supports the technology plan and the purchase of new financial software as well as some of the positions over a couple of years. Stated the target for reserves is 45% of 12 million and there is now an excess of that and he would prefer to give some of it back. Erickson: Stated there seems to be agreement that the police supervisor is necessary and that the mo- nies set aside for facilities management and technology is necessary as well as the targeted level of re- serves. Stated he does not agree on a one year big hit for reducing the levy as it could then result in a one year big hit in increases. Believes there should not be radical changes from year to year, but rather the changes should be spread it out over several years in a planned manner. Myser: Believes that returning the reserve in one fell swoop prohibits people from getting used to it. Asked Erickson what he would be willing to give back over what period of time. Erickson: Replied that a three -year period with discussions about the proper amount for a working budget seems reasonable. Keeney: Agreed that a zero levy increase actually proposes to collect the money that we were not getting from the State. Proposed that to have integrity and say that the levy is not being increased, he would have to go with a $9.855 million levy. Stated he takes issue with saying we paid dearly for not having police su- pervisor, and rather believes there were issues with specific employees. The City Manager makes person- nel decisions and the Council should not micromanage where the dollars are spent on a case by case ba- sis. Believes the City should not increase the number of staff. Stated he is a proponent of a smaller levy that is no higher than $9.855 million, but is unsure that should all come out of reserves. Concurs with a gradual reduction of reserves; but does not believe the proper use of reserves should be increased spend- ing. Soukup: Sought clarification on a zero increase of the levy asking if the $259,000 contra revenue account was just for one year and whether it was applied to the levy in the same sense that it is being applied now. 7 DRAFT 09 0611 City Council meeting minutes J. Erickson: Replied that in 2011 the credit was $259,000. The levy was established at a higher level be- cause it was known that the money would not be received. The amount in previous years was less per year. It is a one -time annual adjustment, but it is not a credit that is artificially reducing the tax levy. Soukup: Asked if the City knows that the aid will not arrive from the State during the budget process. J. Erickson Have known about it each year since 2008 so it has been included in the budget as a credit. Soukup: Asked the time line discussed in work sessions for bringing down the reserve. J. Erickson: The long range financial plan was a five year plan. Soukup: Commented that many programs from the State are going to go away and cutbacks will continue. Reserve situations can be considered either a negative or a positive. Believes the City needs to be pre- pared for future cut backs and assure it does not experience a deficit. Commented that it seems to be a split Council. Myser: Asked Soukup if she supports a levy increase for a $10.1 million or $9.855 million. Soukup: Supports $10.1 million. Myser: Expressed belief that this is an accounting mechanism and the money collected was $9.855 million so that is the true levy; and if it is changed from that, it is being increased. Soukup: The proposed budget reflects the anticipated expenditures for the year. Reiterated that this is a preliminary budget and additional work sessions are planned to refine it. MOTION BY ERICKSON, SECOND BY SOUKUP ADOPTING A RESOLUTION APPROVING THE PRO- POSED 2012 CITY BUDGETS AND CERTIFYING PRELIMINARY 2012 CITY OF PRIOR LAKE PROP- ERTY TAX LEVY TO SCOTT COUNTY DEPARTMENT OF TAXATION AS PROPOSED BY STAFF. VOTE: Ayes by Erickson and Soukup. Nays by Myser and Keener. The motion failed. MOTION BY KEENEY, SECOND BY MYSER TO ADOPT A RESOLUTION APPROVING THE PRO- POSED 2012 CITY BUDGETS WITH THE TOTAL LEVY REDUCED TO $9,855,000 AND GENERAL FUND EXPENDITURES REDUCED BY A CORRESPONDING AMOUNT AND CERTIFYING PRELIMI- NARY 2012 CITY OF PRIOR LAKE PROPERTY TAX LEVY TO SCOTT COUNTY DEPARTMENT OF TAXATION. VOTE: Ayes by Myser and Keeney. Nays by Erickson and Soukup. The motion failed. Boyles: Referred to State Statute 275.065 which states that if the taxing authority fails to certify its pro- posed levy by the due date, the County Auditor shall use the previous year's final levy for the purposes of determining proposed property tax notices and public advertisings. Noted there are complexities in admi- nistering that. J. Erickson: Stated that it is complicated by debt obligations. Parts of debt service levy would increase, specifically the market value levy for the referendum debt. There is also EDA lease revenue debt which is tax capacity based. Pieces of the levy need to increase to fulfill the obligations to pay the debt. Asked Cindy Geis to add information regarding tax capacity vs. market value levies. Cindy Geis, Scott County, stated she is the manager of the property customer services area which deals with the Planning and Zoning Office, the County Surveyors Office, the Taxation Office, the Recorders Of- fice, the Elections Office and the Customer Service area as well as serving as the appointed County Audi- tor/Treasurer. Addressed what happens when a levy is not adopted. Stated the County would take the levy as adopted last year to be the proposed levy. The market value levy will be increased because by Sta- tute, cannot levy less than the amount of the debt is unless there is money in that reserve fund to cover that particular bond. Anticipates that the General Fund levy will be reduced by the same amount that the mar- ket value levy is increased. Myser: Asked the debt service amounts. 0 DRAFT 09 0611 City Council meeting minutes J. Erickson: Debt in the General Fund for EDA lease revenue was increasing $14,748; debt associated with market value referendum debt was increasing $23,160. Debt with the capital improvement program was declining $84,855. Myser: Concluded that the net difference is a reduction. Geis: Commented that the problem is that the market value debt fund needs to go up and that is a different tax base. Even though the debt service has enough to cover other debt service funds that are not market value driven, but tax capacity base driven; whether you reduce the debt service levies that are net tax ca- pacity driven or the General Fund, the increase to the market value levy is going to show differently. On the property tax statement the market value taxes show differently than the other city taxes on the final tax statement. Myser: Clarified that the net effect is to increase the market value levy, but it will be taken from the tax ca- pacity base levy. Geis: The law changed approximately four years ago which granted authority to take last year's final levy and use it as the proposed levy. Keeney: Asked if action is needed to set time and place for public informational meetings. Geis: Notice should be taken to set a public information meeting to talk about tax levy; and certification is needed to provide what the current debt service levels are for net tax capacity based debt as well as mar- ket value based debt so the County has final numbers. Otherwise, State law requires going back to the original debt service fund bonds and levy all of the dollars regardless of the what debt service levy fund balance is. Need to know which funds have enough reserve in it and which do not as well as establishment of the public meeting on budget and tax levy. MOTION BY KEENEY, SECOND BY ERICKSON FOR THE CITY COUNCIL TO CONSIDER THE 2012 GENERAL FUND, DEBT SERVICE, REVOLVING EQUIPMENT FUND, EDA SPECIAL REVENUE FUND AND ENTRPRISE FUND BUDGETS AND THE FINAL 2012 PROPERTY TAX LEVY DURING ITS REGU- LARLY SCHEDULED COUNCIL MEETING AT 7 P.M. ON MONDAY, DECEMBER 5, 2011 AT 4646 DA- KOTA STREET SE, PRIOR LAKE, WITH A CONTINUATION (IF NECESSARY) AT 7 P.M. ON DECEM- BER 19, 2011. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. Geis: Noted that any reserve balance that will be used to offset debt service requirement would have to be adopted by resolution. Myser: Asked if that could be done with the final levy. J. Erickson: Suggested using the third "whereas" in the proposed resolution to state there are sufficient fund balance reserves and adopt the debt service portion reflected there. Myser: Clarified that it is the $2,835,610 amount. J. Erickson: Affirmed that is the levy associated with the debt that we would want to adopt and state that there are sufficient funds to cover any remaining balances; and the net of that would be adjusted against the general tax levy. Keeney: Sought clarification of what the general tax levy was last year. Geis: Stated she needs a statement certifying that there are enough funds in the reserve funds to manage the debt with the exception of the bonds that are the market value based bonds. Those could be pointed out as needing increases and leave the rest as a general statement without specifying how much is general levy. Suggested that with a split vote, the Council would not want to get into approving a levy line item of any sort or it may be perceived as the total levy. MOTION BY ERICKSON, SECOND BY KEENEY TO SUPPLY A STATEMENT TO SCOTT COUNTY THAT THERE ARE ENOUGH FUNDS IN THE RESERVE TO MANAGE THE DEBT WITH THE EXCEP- lr DRAFT 09 0611 City Council meeting minutes TION OF BONDS THAT ARE MARKET VALUE BASED. THE MARKET VALUE BASED BONDS MAY NEED INCREASES TO SATISFY THE DEBT SERVICE. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. Consider Approval of a Resolution Amending the Special Assessment Policy City Engineer 1 Inspections Director Poppler reviewed the sections of the policy and the proposed changes to them. Noted that changes must be made to City Code in order for this proposed assessment policy to comply. Comments: Soukup: Understands this action is needed to make the assessment policy consistent with State Statute. Asked if the assessment policy can be changed as needed. Poppler: Affirmed, stating there have been 11 changes since 1989. Erickson: Commented on the interest rate charged for assessments, stating the current rate is high and there should be a non - arbitrary calculation for assessment rate. Boyles: Stated that the Assessment Review Committee looks at each assessment and that is an item they discuss. Questioned whether it should specifically be set out in the policy as assessments might be for va- rying lengths. Erickson: Replied there should be some kind of guideline on the interest rate so it is not arbitrary. Keeney: Supported the concept of standardization of the interest rate. Myser: Stated that the Assessment Review Committee meets on Thursday and staff could bring it up at the meeting. Supports standardization of the interest rate. Keeney: Commented that there have been issues in the past with lots that have shared driveways. Be- lieves that when there is commercial property abutting more than one street of a residential area there is value in having rear access to commercial property and assessment of that access should be in the policy. Myser: Concurred with Keeney's comments. Asked how the fees relate to those in other communities. Poppler: Replied that City fees were determined through a study done in the mid- 2000's and are based on what the City needs to put in a new development. Myser: Asked if an independent third party studied the cost and came up with the fee amounts. Poppler: Replied that the 4% and 5% fees are based on projects and history. The extraordinary costs are billed to the developer. In some cases, we refund some of the costs if a project uses less than the fees col- lected. Myser: So both administration and construction observation could be refunded if the anticipated cost is not used. Poppler: Construction observation fees could be returned, but administration fees are not. Boyles: Reviewed the history of Prior Lake in trying to charge based on a rational nexus by calculating what our costs are and basing fees on those actual costs. Myser: Asked if our costs are in line with other cities. Boyles: Believes everyone has a different way of charging the rates and it can be difficult to track. Myser: Asked if the differentiating ways of doing business between cities increases the cost for developers to learn the different ways that cities do business. Asked if it can be simplified for developers. Pace: Replied it is not complicated and is detailed in the developer's contract that they sign. Stated she is opposed to looking at what other cities charge and then charging that. A fee justification study was con- ducted with the Builders Association in the Twin Cities and one of the largest developers at the time. A committee was formed and a methodology agreed upon, which was subsequently adopted by BATC and other cities. Boyles: Summarized the revisions the Council would like to have addressed in the assessment policy. Pace: Commented that the previous policy identified an 8% interest rate, which was removed because that was deemed arbitrary. Stated that staff can come up with something that is tied to an appropriate index. 10 DRAFT 09 0611 City Council meeting minutes MOTION BY ERICKSON, SECOND BY KEENEY TO DIRECT STAFF TO AMEND THE ASSESSMENT POLICY TO ADDRESS LOTS THAT HAVE SHARED DRIVEWAYS, ADDRESS COMMERCIAL PROPER- TIES THAT ABUT RESIDENTIAL AND HAVE ACCESS TO MULTIPLE STREETS, AND ESTABLISH STANDARDS FOR INTEREST RATES, VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. OTHER BUSINESS Community Events Erickson: Firefighters will host the 32nd annual chicken BBQ on September 11 from 3 -8 p.m. Money goes to the relief fund which goes to members and community. Keeney: Added that the cost for the BBQ is $12 for adults, $6 for kids. Soukup: Today is first day back at school. Asked everyone to watch out for the little ones. Wished ISD 719 a good school year. Myser: The Mayor's Cup will be run at Raceway Park in Shakopee on September 9. A portion of the money raised goes to the local food bank. ADJOURNMENT With no further comments from Council members, a motion to adjourn was made by Keeney and seconded by Erickson. With all in favor, the meeting adjourned at 10:13 p.m. Frank Boyles, City Manager Charlotte Green, Administrative Asst. DRAFT 09 0611 City Council meeting minutes